Thirteen years after its founders first rented air mattresses in their San Francisco apartment, Airbnb is making its long-awaited stock market debut. Airbnb raised $3.7 billion in the initial public offering. (Dec. 5)
Airbnb reported Thursday that its first-quarter loss more than tripled, to $1.2 billion, as travel remained depressed by the pandemic and the company was weighed down by costs from past borrowing.
However, revenue topped the same period in 2019, and Airbnb recorded billions in new bookings as the rollout of vaccines against COVID-19 raised hopes for a travel boom.
The home-sharing business said in a letter to shareholders that travel is starting to return, “and we expect a travel rebound unlike anything we have seen before.”
Still, Airbnb expressed concern about travel restrictions and lockdowns in Europe, a key market for summer rentals. The San Francisco-based company said it is too early to predict whether the pace of the travel recovery will continue in the second half of the year.
Pandemic-related restrictions are cutting into Airbnb revenue, particularly in Europe. The company has seen growing demand for travel in the U.S., however, with particular interest in rentals in beach and mountain locations. Bookings in cities, which were a strength before the pandemic, have not recovered.
Cancellations have eased from 2020 but remain higher than before the pandemic, although company officials gave no figures.
CEO Brian Chesky predicted that even after the pandemic more people will work outside central offices, providing a ready supply of future guests. He said 24% of Airbnb customers now book stays of at least 28 days, compared with 14% before the pandemic, which he suggested would give home-sharing an advantage over hotels.
“The longer you stay somewhere, the more you are inclined to stay in a home,” he said on a call with analysts.
Airbnb’s first-quarter results were hurt by losses related to debt repayment and an adjustment in the value of stock warrants issued in connection with money it borrowed last year during the depths of the pandemic downturn in travel.
The loss equaled $1.95 per share. Wall Street expected a loss of $717 million, or $1.07 per share, according to a FactSet survey of 27 analysts.
Airbnb’s revenue rose 5% from a year ago and 6% over the same quarter in 2019, to $887 million. That topped the analysts’ forecast of $721 million.
The value of new bookings recorded in the quarter jumped to $10.3 billion, up from $6.8 billion a year earlier and more than $4 billion higher than in the fourth quarter of 2020.
Airbnb released the results after a day in which the shares fell 3.2% in regular trading. They fell less than 1% in extended trading.
The shares have fallen 37% since their Feb. 11 peak, dropping below where they closed after their stock market debut on Dec. 10.
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